It's time to take another whack at America's budget deficit. Congress' newly minted Joint Select Committee on Deficit Reduction, which is charged with lowering the federal government's sea of red ink by at least $1.2 trillion over the next 10 years, meets for the second time on Tuesday. The panel will hear from Douglas Elmendorf, director of the Congressional Budget Office. Elmendorf is expected to lecture the committee about the history of U.S. budget deficits.

The committee already is off to a rocky start. Republican Sen. Jon Kyl of Arizona said last week that he would request that his fellow panelists exclude the topics of tax hikes and entitlement reforms from their discussions. Kyl says a compromise on cuts will be impossible if these divisive issues are left on the table. But many economists argue that without either tax hikes or significant entitlement reform, the U.S. remains on a path to insolvency.

Toxic Topics: The deficit-cutting panel may have to avoid the subjects of tax hikes and entitlement reform to reach a pact.
William Waitzman for Barron's

Kyl may have a valid point, given the presence on the panel of hard-liners from both parties. At least three Republicans are vociferously opposed to the tax hikes on the wealthy demanded by Democrats; and an equal number of Democrats are opposed to cuts in entitlements like Medicare and Social Security sought by the GOP.

If taxes and entitlements are taken off the table, the so-called supercommittee would be more accurately nicknamed "Committee Lite" for avoiding tough but necessary choices. But if the committee were to reach a credible compromise, it just might set some bulls free on Wall Street.